State support for urban renewal is not being fully used, even as project delays continue. In a report published Tuesday by State Comptroller Matanyahu Englman, about 33% of the money transferred to local authorities under framework agreements for urban renewal has not yet been spent, and 24% of the 2023 budget for those agreements, amounting to 105 million shekels out of 440 million, has still not been allocated to municipalities.
The report examined planning and promotion of urban renewal in local authorities during June to October 2025, focusing on 2021 to 2024. Englman said approvals have risen, but the sector remains heavily concentrated in central Israel and Tel Aviv, with 58% of projects, 472 of 814, and 56% of planned housing units. By contrast, 23 renewal projects in Beit She'an, Tiberias, Safed and Kiryat Shmona have received no building permits between 2017 and 2025, despite being in areas especially exposed to strong earthquakes and security risks.
The comptroller also found that among 12 authorities that received 2023 framework-agreement funds, average utilization was only 33%. Ramat Gan used about 98% of its allocation and Bat Yam about 82%, while Beit Shemesh used only about 2%, and Lod and Kiryat Yam used none. The report said municipalities struggle to use the money because they must pay for infrastructure renewal or construction before receiving reimbursement, and they find it difficult to estimate true infrastructure costs when signing the agreements.
Englman added that 23 of 61 local authorities with active evacuation-and-reconstruction projects, about 32%, do not operate an urban renewal administration. At the same time, the number of such administrations grew 5.8-fold between 2017 and 2025, reaching 46 from 8. The report also highlighted long delays, including a 23-year wait for the Brandes complex in Ra'anana, four years from approval to the final land appraisal for the Katznelson complex in Lod, and five years from 2018 to Vatel approval for the Yosftel complex in Kiryat Yam, which still had no building permits as of December 2025.
The comptroller further noted major discrepancies in renewal data between the Housing Ministry, the government renewal authority and local councils, including about 40,000 housing units in Lod and about 15,000 at the licensing stage. The Renewal Authority said it is studying the findings, working on a three-year plan to speed up procedures, and that recent government decisions allocated about 1.4 billion shekels for grants, continued planning and municipal administrations in peripheral cities, especially along the confrontation line.
